UK Experience in Infrastructure Development: from planning and prioritisation through to delivery and monitoring.

Infrastructure and Projects Authority
UK-Caribbean Infrastructure Conference
23 November 2023
St Vincent & the Grenadines

UK Experience in Infrastructure
Development:
from planning and prioritisation
through to delivery and monitoring.
Javier Encinas
Deputy Head of International
Project and Structured Finance Group
HM Treasury and Cabinet Office
UK-Caribbean
Infrastructure Conference

UK current and past infrastructure status
3 |
Infrastructureand Projects Authority
Sustainable Infrastructure Course

UK Infrastructure Investment
• Around 60% of the UK’s
Infrastructure Pipeline` will be
financed and delivered by the
private sector.
UK infrastructure sector investment from 2016/17 onwards
• This equates to over £270 billion
($336 billion)`
The UK is an attractive
destination for investors.
Nabarro LLP’s 2023
Infrastructure Index ranks the
UK as the number one country
for infrastructure investors.
The UK is also a top 10 country
for competitiveness and
infrastructure in the World
Economic Forum’s Global
Competitiveness Index.
4 |
Current situation of UK Infrastructure

Situation of UK Infrastructure in the 1990s
■ Legacy of under- investment in Operation & Maintenance of the existing infrastructure stock
▪ Resulted in aging poorly maintained infrastructure
▪ Backlog of school repairs in 1997 estimated at £7billion
▪ Backlog of NHS building maintenance over £3billion
■ Legacy of under- investment in Greenfield social infrastructure projects
▪ Lack of investment in new schools, hospitals, social housing, etc. was holding back the country’s social
development
■ Limitation of Government budget for investment in infrastructure
▪ Constrained capital budgets
▪ Constrained fiscal space
■ Limitation of the reach and efficiency of the traditional procurement route
▪ Conventional procurement resulted in time and cost overruns

Traditional Procurement – Cost Overruns
Guy’s Hospital
Budget: £36m
Guy’s Hospital
Outturn: £124m
Faslane Trident
Submarine Berth
Budget: £100m
Faslane Trident
Submarine Berth
Outturn: £314m
Scottish Parliament
Budget: £40m
Scottish
Parliament
Outturn: £431m

Lessons learned in the UK and key recommendations
7 |

Recommendation 1:
Develop a solid and flexible institutional framework
8 |

BEIS, Department for Business, Energy and Industrial Strategy; CO, Cabinet Office; DCLG, Department for Communities and Local Government; DCMS, Department for
Digital, Culture, Media and Sport; Defra, Department for Environment, Food and Rural Affairs; DfT, Department for Transport; DIT, Department for International Trade; ERDF,
European Regional Development Fund; HMT, the Treasury; HS2, High Speed Two; IPA, Infrastructure and Projects Authority; LEP, Local Enterprise Partnership; NIC,
National Infrastructure Commission; ORR, Office of Rail and Road; PFO, private finance initiative; PPP, public private partnership; SoS, Secretary of State. Ministerial names
correct as of November 2017.
Source: Adapted from map of Institute for Government analysis
Institutional Infrastructure Framework of the United Kingdom
Responsibilities by Department (Nov. 2017)
9 |

HM Treasury
(HMT)
National Infrastructure
Commission (NIC)
Executive Agency of HMT in charge
of:
● Defining long-term vision
● Analysing long-term infrastructure
needs
● Conducting in-depth thematic and
sectoral studies
● Issuing impartial and independent
recommendations
Ministry of Economics and Finance in
charge of:
● Defining public policies
● Establishing budget frameworks
● Encouraging private investment in
infrastructure
● Maintaining a stable regulatory
framework
Center of Expertise of HMT and CO in
charge of advising and supporting in:
● Implementing public policies on
infrastructure
● Planning and prioritising
investments programmes
● Delivering, Financing and
Evaluating infrastructure projects
● Transforming and Monitoring
system performance
Infrastructure and Projects
Authority (IPA)
Main stakeholders and their roles
10 |
UK Government financial institution
in charge of:
● Providing leadership to the market
in the development of new
technologies
● Crowding-in private capital into key
infrastructure sectors
● Managing risk through cornerstone
investments and a range of
financial tools
UK Infrastructure Bank
UKInfrastructure B
ank
Policy Design
March 2021

HM Treasury / Cabinet Office
(Infrastructure and Projects
Authority)
Department of Health
(Infrastructure Unit)
Department for
Education
Department for
Transport
Local Partnerships
Procuring Authority
(at the national, regional
or municipal level)
Procuring Authority
or municipal level)
Procuring Authority
or municipal level)
Procuring Authority
or municipal level)
National Audit Office
Unit
Wales
Unit
Scotland
Unit
Northern Ireland
IPA –Central Unit
Programme development, policy
design, project delivery and
assurance
LP –Municipal Unit
Sub-national level programme
development and project delivery
support
Infra – Sectoral Units
Sector-specific programme
development and project delivery
support
Procuring Authorities,
Project dentification, selection,
preparation, procurement,
management and monitoring
NAO
Programme and project ex-post audit
and cross-sectoral comparison of
projects
Regional Units
Programme and project support for
Wales, Scotland and Northern Ireland
Commission
Main stakeholders and their roles
UK Infrastructure Bank

Differences PUK IUK IPA
Structure JV 51% priv / 49% pub 100% HMT owned unit JV 50% HMT / 50% CO
Location outside Gov. HMT HMT
Operating model charging model free at the point of use (exc. Int’l). free at the point of use (exc. Int’l)
Scope PPPs Infrastructure Infra and Major Projects
Role Delivery Policy, Planning, Delivery, Policy, Planning, Delivery,
& Financing Finance & Assurance
Similarities PUK IUK IPA
Mission Public Public Public
Staff Public-Private Public-Private Public-Private
Employees 70 80+ 160
Skills 100% commercial 70% comm. - 30% policy 60 comm. / 40% policy
Contractual terms Sim. To Private Sector Comm. Specialist Grade Comm. Specialist Grade
2000-2010 2010 – 2016 2016 - ?
12 |
Evolution of the IPA

Recommendation 2:
Adopt a whole project lifecycle aproach to infrastructure development:
from planning and prioritisation through to delivery and contract
management
13 |

Planning and
Prioritisation
Preparation, Appraisal, Approval,
Procurement , Delivery and Financing
Contract Management
and Performance
Monitoring
At National level
• National Infrastructure
Assessment;
Strategy;
Delivery Plan.
At Regional level
• Regional Plans;
• Regional Programmes
(e.g. Northern
Powerhouse, Midlands
Engine, Oxford-
Cambridge Corridor, etc).
At Local level
• Local plans;
• City plans (ej. London
transport plan).
Adopt a whole project lifecycle approach:
from planning and prioritisation through to delivery and contract
management
14 |

HM Treasury
(HMT)
Commission (NIC)
Executive Agency of HMT in charge
of:
● Defining long-term vision
● Analysing long-term infrastructure
needs
● Conducting in-depth thematic and
sectoral studies Issuing impartial
and independent
recommendations
Ministry of Economy and Finance in
charge of:
● Defining public policies
● Establishing budget frameworks
● Encouraging private investment in
infrastructure
● Maintaining a stable regulatory
framework
Center of Expertise of HMT and CO in
charge of advising and supporting in:
● Implementing public policies on
infrastructure
● Planning and prioritising
investments programmes
● Delivering, Financing and
Evaluating infrastructure projects
● Monitoring and improving system
performance
Infrastructure and Projects
Authority (IPA)
Planning and prioritisation of investment programmes
● Respond to NIA with National
Infrastructure Strategy (NIS)
● Develop National Infrastructure
Assessment (NIA)
● Implement NIS through National
Infrastructure Delivery Plan
(NIDP) and reforms to the sytem
15 |

£ 600 billion of investment in the portfolio
in the short and medium term
16
Investment in 2020/21 Investment in 2026/27
16 |

■ The 2017 edition of the National Infrastructureand Construction Pipeline can be found
at:https://www.gov.uk/government/publications/national-infrastructure-and-construction-pipeline-2017
■ The Pipeline can also be found on an interactivemap on this site: https://www.building.co.uk/the-national-infrastructure-and-
construction-pipeline/map/
17 |

Planning and
Prioritisation
Preparation, Appraisal, Approval,
Procurement and Delivery
Contract Management and
Performance Monitoring
At National level
Assessment;
Strategy;
Delivery Plan.
At Regional level
• Regional Plans;
• Regional Programmes
(e.g. Northern
Powerhouse, Midlands
Engine, Oxford-
Cambridge Corridor, etc).
At Local level
• Local plans;
• City plans (ej. London
transport plan).
18 |
Contract management and performance monitoring of operational
projects

Unitary payments for PFI/PF2 operational projects
(forecast to 2049)
Source: IPA Data Base
*
19 |
Sustainable Infrastructure Course for ASEAN
Contract management and performance monitoring of PFI / PF2
operational projects

Business As Usual Contract Expiry and Handback Future Services Delivery
● Gestionar activos y
servicios de acuerdo con
las obligaciones
contractuales.
● Mantener escrutinio de la
calidad y precisión de la
documentación.
● Generar conciencia para
cerrar cualquier disputa /
deficiencia, como falta de
mantenimiento acumulado
(backlog).
● Enfocarse en las fallas de
desempeño repetidas y las
consecuencias al
reemplazo del ciclo de
vida
● Establecer un equipo de vencimiento de contrato
● Revisar pasivos pendientes
● Asegurar el conocimiento de la documentación, los
activos y los sistemas que se devolverán.
● Determinar la solidez del contrato, los requisitos de
devolución del contrato y las soluciones disponibles
para generar un valor óptimo al vencimiento.
● Acordar estándares y medidas para la encuesta de
condición de los activos e instalaciones
● Revisar el informe de la encuesta de condición y
llegar a un acuerdo sobre el camino a seguir
● Negociar obras correctivas y / o compensaciones.
● Acordar la metodología para evaluar y aceptar el
trabajo completado
● Copnsiderar compromisos de recursos humanos:
transferencia de personal, pensiones, contratación de
nuevo personal, etc.
● Revisar las opciones según el
futuro de los activos y
servicios.
● Seleccionar los marcos
adecuados para la
contratación de servicios
● Desarrollar especificaciones
de servicios y KPI para los
servicios subcontratados.
● Diseñar un proceso
transparente de
adquisiciones
● Garantizar la continuidad de
los servicios e implementar la
transferencia de la prestación
de servicios y las
responsabilidades de gestión
de activos.
● Desarrollar una nueva
estructura de equipo y
responsabilidades.
Key functions for the management of PFI/PF2 operational projects – 7 years before hand back
20 |
Sustainable Infrastructure Course for ASEAN
IPA central support to Contract management and performance
monitoring of PFI / PF2 operational projects

95% of the infrastructure we need is already here, with us
21 |
Measurement, improvement and transformation of results (outputs)

■ In 2017, IPA developed the "Transforming Infrastructure Performance"
programme to transform the performance of infrastructure.
■ This programme seeks to improve the quality of infrastructure, as well as
the benefits (outcomes) to users, investors and society.
■ The TIP approach covers the entire life cycle of the project: design,
construction, operation and maintenance.
22 |

■ In December 2020, the UK government published the
”Construction Playbook”, which sets out key policies and
guidance for how public works projects and programmes are
assessed, procured and delivered.
■ The Construction Playbook captures commercial best practices
and specific sector reforms outlining the government’s
expectations of how contracting authorities and suppliers,
including the supply chain, should engage with each other.
■ The Playbook aims to strengthen the health of the construction
sector, including by addressing low levels of productivity and
future skills shortages to create a profitable, sustainable and
resilient industry with a well-trained workforce for the future.
23 |

24 |

Recommendation 3:
Develop a standardised coherent infrastructure system
25 |

Policy / Regulatory Framework
(Policy)
• Political Support
• Policy initiatives
• Infrastructure Investment Programmes
Institutional Framework
(Public Sector Capacity)
• Infrastructure units
• Technical capacity (internal teams and
external consultants) of the public
sector
Industrial and Commercial Framework
(Private Sector Capacity)
• Potential partners from the private
sector (local and international)
• Apetite, capacity and capability of the
financing sector
Operational Framework (Processes)
• Clear processes and procedures
• Practical guidance and methodologies
• Standardised contracts and project
documentation
26 |
Important frameworks
for the development of Infrastructure

Strategic Outline
Case (SOC)
Outline Business
Case (OBC)
Full Business
Case (FBC)
Confirmed
FBC
Procurement
Live
Procurement
Live
Project
Identifie
d
Financial
Close
S1 S2 S3 O1 O2 O3 P1 F1 F2 F3 P2 C1 C2
P3
O2
SOC OBC
FBC
In the United Kingdom, project information (costs, times, quality, benefits) of both PPP and public works
projects (and even private projects), from all sectors, is captured in a structured, systematic way, from
credible sources, throughout the life cycle of the project, through a transparent operational framework.
27 |
Develop a standardised & coherent infrastructure system
with clear processes and procedures

Text
PIR
NIDP
5CM
NIDP
PIR
5CM
Project Initiation Routemap
“How do we set ourselves up to
successfully deliver projects?
Five Case Model
“How do we demonstrate that projects
are socially beneficial, desirable,
affordable, bankable and deliverable ?”
National Infrastructure Plan, Construction
Pipeline and Delivery Plan
“What infrastructure do we need to develop?
Where and when?”
28 |
with standard guidance, project documentation and tools for project
initiation, preparation, appraisal and approval

■ The Project Initiation Routemap is a tool to successfully launch a project, that is to help define its scope, analyse its
complexity and develop capacities for its good delivery
29 |
Project Initiation Routemap for project initiation

The 5 Case model is a multidimensional
methodology for the preparation, appraisal and
approval of investment proposals, including
infrastructure programmes and projects. Its
objective is to ensure that all approved projects are
necessary, desirable, bankable, affordable and
deliverable
Is the project
deliverable with the
resources in time,
money and personnel
that the authority has?
Is the project financially
affordable?
Is the project commercially
bankable?
Is the project
desirable from a
Value for money
standpoint?
Is the project necessary
from a social stand
point?
30 |
5 Case Model for project preparation, appraisal and approval
Strategic
Case
Economic
Case
Commercial
Case
Financial
Case
Management
Case

Strategic Outline
Case (SOC)
Outline Business
Case (OBC)
Full Business
Case (FBC)
Confirmed
FBC
Procurement
Live
Procurement
Live
Project
Identifie
d
Financial
Close
S1 S2 S3 O1 O2 O3 P1 F1 F2 F3 P2 C1 C2
P3
O2
SOC OBC
FBC
In the United Kingdom, project information (costs, times, quality, benefits) of both PPP and public works
projects (and even private projects), from all sectors, is captured in a structured, systematic way, from
credible sources, throughout the life cycle of the project, through a transparent operational framework.
35 |
Gateway Reviews for project assurance

Lessons Learned
■ The United Kingdom has learned over the past 20 years that it is important to:
▪ Develop a solid and flexible institutional framework that can evolve and adapt to the needs and characteristics of the country.
▪ Adopt a whole life cycle approach for the development of infrastructure. The project preparation and delivery processes are only
two links within the long life cycle of the infrastructure.
▪ Go upstream: plan your infrastructure investment and prioritise (temporarily, sectorally and geographically) your project pipeline.
▪ Go downstream: measure, monitor and manage the performance of (cost, time, quality, benefits and impact) of your operational
projects.
▪ Align planning, delivery and contract management . Planning without delivery is bad theory, delivery without planning and
operational management is bad practice.
▪ Develop a flexible and coherent infrastructure system The infrastructure project life cycle is part of a system made up of
institutions, public policies, processes, procedures, programmes, projects and people.
▪ Standardise guidance, methodologies, contracts, project documentation to prepare, appraise, approve and deliver you
infrastructure programmes and projects.
36 |

Transforming Infrastructure Performance
■ https://youtu.be/qmbx00k38iA

Questions about this session
■ Howimportant are the topicscovered in thissession foryour country?
▪ Not important
▪ Neutral
▪ important
▪ Very important
■ Howusefulare the tools and concepts presentedin this sessionfor your organisation?
▪ Not useful
▪ Neutral
▪ Useful
▪ Very useful
■ Which typeof activity is most usefulto expand your knowledgeon the topicscovered in this session?
▪ Seminars
▪ Training
▪ Strategic Government to Government advisory support
▪ Transactional advisory support from the private sector
39 |Infrastructureand Projects Authority

Javier.Encinas1@ipa.gov.uk
40 |

UK Experience in Infrastructure Development: from planning and prioritisation through to delivery and monitoring.

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